ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has imposed a Rs25 million fine on the Lahore Electric Supply Company (LESCO) for failing to improve its transmission and distribution (T&D) losses and bill recoveries during FY 2023-24, compared to the previous fiscal year.
According to Nepra, the decision follows findings from the Circular Debt (CD) Report for June 2024, received from the Central Power Purchasing Agency-Guaranteed (CPPA-G). The report revealed that total electricity purchases by distribution companies (DISCOs) fell slightly from 116,696 GWh in FY 2022-23 to 115,142 GWh in FY 2023-24, while overall T&D losses increased to 18.31% from 16.84%, breaching the regulator’s allowed target of 11.77% by 6.54 percentage points.
This breach contributed an estimated Rs276 billion to the country’s circular debt for the fiscal year, despite DISCOs being allocated Rs163.1 billion in investments to strengthen their networks.
Within this context, LESCO was identified as a key contributor to the rising financial losses. Its T&D losses jumped to 15.92% in FY 2023-24 from 11.88% a year earlier, pushing its financial loss from Rs25.8 billion to Rs47.6 billion.
During the hearing, LESCO admitted that its officials were preoccupied with law enforcement investigations into overbilling, hindering operational oversight. The company further conceded to instances of overbilling in violation of the NEPRA Consumer Service Manual (CSM) and confirmed that excess amounts had been refunded or adjusted.
After reviewing the evidence, Nepra concluded that LESCO failed to provide a satisfactory explanation in response to the show-cause notice. Consequently, under the NEPRA (Fine) Regulations, 2021, the Authority decided to penalize the company Rs25 million for its inability to improve performance in loss reduction and recovery during FY 2023-24.
